We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Accenture (ACN) to Boost Cybersecurity with DPS Acquisition
Read MoreHide Full Article
In an effort to improve its government security portfolio, the global IT services provider Accenture Plc (ACN - Free Report) recently inked an agreement to acquire Defense Point Security, LLC (DPS). However, the financial details of the transaction were kept under wraps.
Rationale Behind Acquisition
Based in Alexandria, VA, the privately held cybersecurity company, DPS, was founded in 2007. The company is well known for providing advanced cyber defense solutions to the U.S. federal government. Additionally, DPS is specialized in providing advanced Security Operations Center (SOC) expertise, cyber operations, security engineering and cyber analytics to the same.
Upon successful completion of the acquisition, Accenture intends to integrate DPS business with the Accenture Federal Services business, a wholly-owned subsidiary of Accenture LLP. The company claims that its “federal business has served every cabinet-level department and 30 of matt the largest federal organizations”.
Therefore, the latest deal is expected to expand Accenture’s federal services capabilities as well as strengthen its leadership position in providing cybersecurity solutions to the U.S. federal department.
David Moskovitz, chief executive at Accenture Federal Services, said that “The addition of DPS’ specialized cyber defense tools and methodologies, together with our powerful client insights, will further propel our strategy to be a leading provider of end-to-end, federal enterprise security services.”
Acquisitions – A Key Growth Strategy
Accenture pursues strategic acquisitions to diversify its offerings and expand operating markets. So far this year, the company has either completed or has signed about eleven acquisition deals across various business segments, including IT security, CRM capabilities, strategy consulting, etc. Last year, it had closed 21 takeovers.
These acquisitions have enabled Accenture to foray into newer markets, diversify and broaden the product portfolio, and maintain its leading position. A strong cash balance of $3.50 billion and an operating cash flow of $2.52 billion at the end of third-quarter fiscal 2016 will support Accenture’s inorganic growth strategy.
Bottom Line
Accenture’s long-term prospects look promising due to sustained focus on new and innovative product launches, continuous investments in enhancing digital and marketing capabilities, as well as major acquisitions. Moreover, we believe that regular acquisitions will significantly contribute to the company's revenue stream.
However, increasing competition from Cognizant Technology Solutions (CTSH - Free Report) , International Business Machines Corporation (IBM - Free Report) and CoreLogic, Inc. remains a concern. Also, we are cautious about its near-term performance, given a strained IT spending scenario. As per a research report by Gartner, worldwide IT spending is expected to remain flat year over year in 2016 at $3.41 trillion, due to currency fluctuations triggered by the Brexit episode.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Accenture (ACN) to Boost Cybersecurity with DPS Acquisition
In an effort to improve its government security portfolio, the global IT services provider Accenture Plc (ACN - Free Report) recently inked an agreement to acquire Defense Point Security, LLC (DPS). However, the financial details of the transaction were kept under wraps.
Rationale Behind Acquisition
Based in Alexandria, VA, the privately held cybersecurity company, DPS, was founded in 2007. The company is well known for providing advanced cyber defense solutions to the U.S. federal government. Additionally, DPS is specialized in providing advanced Security Operations Center (SOC) expertise, cyber operations, security engineering and cyber analytics to the same.
Upon successful completion of the acquisition, Accenture intends to integrate DPS business with the Accenture Federal Services business, a wholly-owned subsidiary of Accenture LLP. The company claims that its “federal business has served every cabinet-level department and 30 of matt the largest federal organizations”.
Therefore, the latest deal is expected to expand Accenture’s federal services capabilities as well as strengthen its leadership position in providing cybersecurity solutions to the U.S. federal department.
David Moskovitz, chief executive at Accenture Federal Services, said that “The addition of DPS’ specialized cyber defense tools and methodologies, together with our powerful client insights, will further propel our strategy to be a leading provider of end-to-end, federal enterprise security services.”
Acquisitions – A Key Growth Strategy
Accenture pursues strategic acquisitions to diversify its offerings and expand operating markets. So far this year, the company has either completed or has signed about eleven acquisition deals across various business segments, including IT security, CRM capabilities, strategy consulting, etc. Last year, it had closed 21 takeovers.
These acquisitions have enabled Accenture to foray into newer markets, diversify and broaden the product portfolio, and maintain its leading position. A strong cash balance of $3.50 billion and an operating cash flow of $2.52 billion at the end of third-quarter fiscal 2016 will support Accenture’s inorganic growth strategy.
Bottom Line
Accenture’s long-term prospects look promising due to sustained focus on new and innovative product launches, continuous investments in enhancing digital and marketing capabilities, as well as major acquisitions. Moreover, we believe that regular acquisitions will significantly contribute to the company's revenue stream.
However, increasing competition from Cognizant Technology Solutions (CTSH - Free Report) , International Business Machines Corporation (IBM - Free Report) and CoreLogic, Inc. remains a concern. Also, we are cautious about its near-term performance, given a strained IT spending scenario. As per a research report by Gartner, worldwide IT spending is expected to remain flat year over year in 2016 at $3.41 trillion, due to currency fluctuations triggered by the Brexit episode.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>